Authors:

  • Shawn Cole

Excerpt

Comparative Regulation of Market Intermediaries: Insights from the Indian Life Insurance Market. Shawn Cole, April 2014, Book Chapter. "This chapter considers regulation of the sales of insurance as a means for reducing the amount of misselling that occurs. After providing background information on the life insurance markets in India and the United States, the chapter focuses on the regulation of commissions disclosure in the two countries. The chapter analyzes the more general issue of regulation of advice, focusing on the three tiers of legal duty (caveat emptor, suitability, and fiduciary) present in U.S. law. It summarizes the discussion of quality of advice in the U.S. and India, and discusses two examples of intermediaries, agents and brokers, which typically refer to slightly different relationships in the American context. The chapter presents experimental evidence on how quality of advice responded to consumer sophistication, preferences, and needs, in addition to market competition. The evidence is used for presenting the recommendations regarding the emerging Indian standards." Link